Global Market Highlight
DJIA rose by +0.21% on Monday (27/09) while S&P 500 slipped by -0.28%, followed by Nasdaq -0.52%. Wall Street closing was mixed due to an increase in the yield of 10-year bonds to 1.5% and 30-year bonds increased by more than 2%. From the economic side, monthly orders for durable goods rose by +1.8% on August-21, or the largest MoM increase since May-21. Subsequently, market participants are still waiting for the approval of the USD1 trillion infrastructure proposal this week. Today the market will be looking forward to several data releases such as: 1) US CB Consumer Confidence; 2) US Fed Chair Powell Testimony; 3) Germany GfK Consumer Confidence.
Domestic Update
• Government will conduct a debt securities auction for 7 series with the indicative target set at IDR12 to 18 trillion on Tuesday (09/28). The indicative target is below the previous auction at IDR21 to 33.5 trillion. MNCS Comment: Lower indicative target was attributable to government front loading strategy for debt issuance in 1H21 so the issuance quota is almost reached. As of September 15, the government has issued debt securities with the total amount of IDR990.31 trillion.
• Furthermore, there was an addition of 103 new Covid-19 cases in Jakarta yesterday.
Company News
1. UNTR IJ recorded 326 sales units of Komatsu on August-21, an increase of +119.41% MoM (vs. 203 units in July-21). As of 8M21, UNTR managed to sell 1,890 units of Komatsu or an increase of +81.20% YoY (vs. 1,043 units in 8M20) (CNBC Indonesia). MNCS Comment: We see that UNTR has the potential to increase sales of Komatsu in the future, driven by increased economic activity in the mining sector, particularly coal and nickel. The company also increased its Komatsu sales volume target of 2,800-3,000 units in FY21E. Currently UNTR is trading at 9.45x/1.32x PE/PBV levels.
2. ADRO IJ will buy back shares worth IDR4 trillion using the company's internal cash. Buyback will be implemented in stages over a three-month period, starting from September 28, 2021 to December 26, 2021 (Bisnis Indonesia). MNCS Comment: The buyback funding using the company's internal cash shows that the company has good cash flow and capital, it will not have a negative effect on the company's performance. This action is expected to increase the liquidity of ADRO shares. Currently ADRO is trading at 9.80x/0.88x PE/PBV levels.
3. WSKT IJ recorded IDR4.71 trillion revenue in 1H21 or decreased by -41.40% YoY (vs IDR8.04 trillion in 1H20). COGS decreased from IDR6.97 trillion in 1H20 to IDR4.54 trillion in 1H21. WSKT recorded IDR154.13 billion net profit in 1H21 (vs net loss of IDR1.10 trillion in 1H20) (Emitennews). MNCS Comment: Even though the company's revenue has decreased, the significant increase in bottom line is due to the profit from the toll road divestment. WSKT is currently trading at 138.98x/1.49x PE/PBV.
IHSG Updates
JCI weakened by -0.36% to 6,122.50 on Monday (27/09) while net foreign buy reaching IDR355.04 billion. JCI closed lower due to the weakening of the tech sector by -0.84%, followed by the financial sector (-0.72%). On the other hand, the transportation sector strengthened by +1.99%, followed by the energy sector (+1.45%). The investors are still concerned about the update of Evergrande's case as well as the investors anticipate statements from The Fed officials later tonight regarding the tapering policy and the forecast for the interest rate benchmark. On the other hand, the Rupiah strengthened at IDR14,252 level on the spot market. We estimate the JCI will move in the range of 6,060-6,170. Today's recommendations: ASII, LSIP, MDKA, ACST.
Corporate Action
RUPS: RMBA
Public Expose: YPAS
Disclaimer On
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